Chapter 6

Lean Management
Case Study
Total Quality Management at Toyota Motors
Case Questions
1. How does Toyota use lean manufacturing?
The Toyota Way is about Toyota’s unique approach to lean management. In creating a
learning enterprise, the Toyota Way was used as a comprehensive expression of the
company’s management philosophy. Lean manufacturing is the practice of maximizing
productivity without incurring waste. The concept was actually created by Toyota, but it
applies to (and is used in) many industries around the world today,
The way Toyota makes vehicles is defined by the Toyota Production System (TPS). It is an
original manufacturing philosophy that aims to eliminate waste and achieve the best possible
efficiency – what is often called a ‘lean’ or ‘just-in-time’ system. TPS is based on two
concepts: jidoka and just-in-time. To implement the system, three wastes must be removed
from the production system: Design out overburden (muri), Reduce inconsistency (mura),
and Eliminate waste (muda).
2. Discuss the two main pillars of ‘The Toyota Way’?
The Toyota Way is based on the two foundational principles of Continuous Improvement
(kaizen) and Respect for People.
Continuous Improvement means that Toyota never perceive current success as our final
achievement. Toyota never satisfied with where it is and always improve business by putting
forth the best ideas and efforts: Toyota company is always keen to create better alternatives,
question accomplishments and investigate future definitions of success.
There are three building blocks shaping our commitment to Continuous Improvement:
1. Challenge – Toyota form a long term vision, meeting challenges with courage and
creativity to realize dreams;
2. Kaizen – Toyota improve business operations continuously, always driving for innovation
and evolution
3. Genchi Genbutsu – Toyota go to the source to find the facts to make correct decisions,
build consensus and achieve goals.
Respect For People refers to Toyota’s own staff as well as the communities and stakeholder
groups. By respect for people Toyota believe the success of business is created by individual
efforts and good teamwork. Respect For People is translated in:

1. Respect – The company respect others, make every effort to understand each other, take
responsibility and do best to build mutual trust
2. Teamwork – Toyota stimulate personal and professional growth, share the opportunities of
development and maximize individual and team performance.
These elements combined define corporate DNA, provide a way of operating that is
recognised by each and every Toyota-member around the globe and enables to sustain our
success in the future.

3. Name any five companies practicing ‘The Toyota Way’.

Nike
Nike is a global producer of shoes and athletic clothing. Recently, Nike has partnered with
other manufacturers and non-governmental organizations (NGOs) to address sustainability
issues. Nike launched a Sustainable Apparel Coalition as a result.
Caterpillar Inc.
Caterpillar has modeled its lean manufacturing process after Toyota. Specifically, Caterpillar
incorporated lean principles to expedite production and reduce waste.
Kimberley-Clark Corporation
Kimberley-Clark adopted the principles of lean manufacturing to increase staff development
and engagement. As a result, absenteeism declined and worker productivity increased.
Intel
Intel, one of the world’s largest producers of computer chips, uses lean manufacturing
principles to guide product delivery. Today, the company states that it takes 10 days to bring
a computer chip to market, compared to 14 weeks just five years ago.
Parker Hannifin
Parker Hannifin is one of the world’s largest producers of motion control technology. Nearly
20 years ago, the company began using electronic strategies to incorporate lean
manufacturing into its production cycle. Ultimately, it increased quality and productivity
while simultaneously reducing cost.
John Deere
John Deere made a significant investment in lean technology in 2003. Its investment paid off
in the form of reducing waste while improving production time and quality. The company
applied its lean manufacturing principles to its main facility in Iowa.
5. Briefly explain the ‘4P’ model of the ‘The Toyota Way’.
The 4P model: Philosophy, Process, People and Partners, and Problem-Solving.
1. Long-term philosophy: The focus should be on extended sustainability rather than
short-term gain and fostering a sense of purpose in employees for productivity.
2. The right process will produce the right results: Continuous improvement is pro-
moted by eliminating the seven wastes identified by Dr Taiichi Ohno, the father of the Toyota
Production System (TPS). The seven wastes (muda) are: overproduction, waiting,
unnecessary transport or conveyance, over-processing or incorrect processing, excess
inventory, unnecessary motion, and defects. Employee empowerment in this area comes from
the fact that any employee can call a halt to production when a problem is detected.
3. Add value to your organisation by developing your people: Leaders must adopt and
promote the company’s work philosophy among employees; employees and teams must
embrace the philosophy and teamwork should be recognised; development of business part-
ners and suppliers should be fostered in a manner similar to the development of employees.
4. Continuously solve root problems to drive organisational learning: Managers must
monitor operations personally to understand problems; solutions should be determined
through consensus and implemented swiftly; organisation must consistently monitor and
evaluate its own practices for the purpose of constant improvement.

6. Which are the 14 Management Principles of ‘The Toyota Way’?

The Fourteen Management Principles of the Toyota Way are:
1. Base your management decisions on long-term objectives and vision, even at the
expense of short-term financial goals.
2. Create a continuous process flow to bring problems to the surface.
3. Use ‘pull’ systems to avoid overproduction.
4. Level out workload (work like the tortoise, not the hare).
5. Build a culture of stopping to fix problems to get quality right the first time.
6. Standardised tasks and processes are the foundation for continuous improvement and
employee empowerment.
7. Use visual control so no problems are hidden.
8. Use only reliable, thoroughly tested technology that serves your people and process.
9. Grow leaders who thoroughly understand the work, live the company philosophy, and
teach it to others.
10. Develop exceptional people and teams who follow your company’s philosophy.
11. Respect your extended network of partners and suppliers by challenging them and
helping them improve.
12. Go and see for yourself to thoroughly understand the situation.
13. Make decisions slowly by consensus, thoroughly considering all options; implement
decisions rapidly.
14. Become a learning organisation through relentless reflection and continuous
improvement.

SHORT-ANSWER QUESTIONS

1. What is lean thinking?

Lean thinking is a transformational framework that aims to provide a new way to think about
how to organize human activities to deliver more benefits to society and value to individuals
while eliminating waste. The term “lean thinking” was coined by James P. Womack and
Daniel T.
 2. Which are the five key lean management principles?

Womack and Jones, founders of the Lean Enterprise Institute (LEI), laid out the five key
principles to any lean implementation. These are Value, Value Stream, Flow,
Pull, and Perfection. When combined, these principles provide the building blocks for teams
to pursue continuous improvement.

3. Name the three types of wastes at the gemba.

The Toyota Production System, and later on the concept of lean, were developed around
eliminating the three types of deviations that shows inefficient allocation of resources: Muda
(waste), Mura (unevenness), and Muri (overburden).

4. Which are the ways to identify opportunities for Kaizen?

Identifying opportunities for kaizen

 Customer surveys: Suggestions for improvement of both internal and external

customers must be recorded.
 Employee suggestions: Being receptive to employees’ suggestions all the time, every
time. Empower employees by giving them the freedom to voice their views and
opinions.
 Brainstorming: Conduct brainstorming sessions on a process you want to improve.
Involve all concerned employees, regardless of their position in the organisation.
 Benchmarking: Identify organisation(s) against which you want to benchmark. It can
be other units within company or competitors or unrelated companies. However, they
should be a leader or ‘best in class’ in the area being benchmarked.

5. What does 5S stand for?

6.
The 5S movement takes its name from the first letter of the five Japanese words – seiri,
seiton, seiso, seiketsu, and shitsuke.

7. What is company-wide quality control (CWQC)?

The Essentials of Company-wide. Quality Control. CWQC can be defined as the management
philosophy that seeks continuous improvement in the quality of performance of all the
processes.

8. Define TPM.

Total productive maintenance (TPM) is the process of using machines, equipment, employees
and supporting processes to maintain and improve the integrity of production and the quality
of systems.
 9. Name the eight pillars of TPM.

The eight pillars of TPM are as follows:

1. Jishu Hozen
2. Kobetsu Kaizen
3. Planned maintenance
4. Hinshitsu Hozen
5. Education and training
6. Development management
7. Safety, health, and environment
8. Pillar 8 – Office TPM

10. Which are the six big losses?

The Six Big Losses are a very effective way to categorize equipment-based losses:
Unplanned Stops, Planned Stops, Small Stops, Slow Cycles, Production Defects, and Startup
Defects. They are aligned with OEE and provide an excellent target for improvement actions.
 11. Define OEE.
OEE is a metric that identifies the percentage of planned production time that is truly
productive. It was developed to support TPM initiatives by accurately tracking progress
towards achieving “perfect production”. An OEE score of 100% is perfect production.

12. Name the different categories of TPM awards.

TPM awards are given to companies that have adopted and successfully implemented the
concepts of ‘total productive maintenance’ developed by the Japan Institute of Plant Main-
tenance (JIPM) and achieved excellent results. This award is challenged by companies inside
and outside Japan, which has enabled good benchmarking among manufacturing companies.

TPM expert: A person who applies TPM and reliability methodologies and tools to assist or
lead teams in optimising asset capacity and productivity at minimum lifecycle cost. A TPM
expert is responsible for determining critical equipment and measuring its overall
effectiveness, thus enabling growth and productivity through optimum asset utilisation.

TPM master: A highly skilled individual experienced in the use of TPM and reliability tools
and methodologies. A TPM master’s responsibilities include assisting the leadership in
identifying high-leverage asset improvement opportunities; leading critical, high-leverage
improvement projects in a business; and leading cultural paradigm shifts from reactive to
proactive asset management.

13. How do you use Theory of Constraints?

TOC is a methodology for identifying the most important limiting factor (i.e. constraint) that
stands in the way of achieving a goal and then systematically improving that constraint until
it
is no longer the limiting factor. In manufacturing, the constraint is often referred to as a
bottleneck.

14. How does the Theory of Constraints relate to continuous improvement?

The theory of constraints is a method for identifying what’s holding your project back and
improving it, so it’s no longer a limiting factor. Both the theory of constraints and lean
manufacturing share the same goal: increasing profits through continuous improvement.
a. Muda Waste
b. Mura Variation
c. Muri Overburden
d. Kanban Visual System
e. Heijunka Levelling
f. Poka-yoke Mistake Proofing
g. Jidoka Building Quality into Process
MATCH THE FOLLOWING

DISCUSSION QUESTIONS

1. Explain how the eight-steps method used in lean manufacturing can be extended
to apply in other areas of business operations.
.Following are the eight steps in applying lean manufacturing to business operations:
1. Start by eliminating waste: This is one of the core principles of lean manufacturing.
Typically, organisation may use a value stream analysis to identify wasteful activities
occurring at the plant. At the same time, it is necessary to intensify efforts to find more
efficient ways to add value to the company’s product line.
2. Reduce unnecessary inventory: The cost of carrying excess inventory generally out-
weighs the potential benefits company might realize. Unnecessary inventory can tie up
resources, reduce response time and cause quality-control issues. Excess inventory may
become problematic if some of the inventory eventually becomes obsolete.
3. Shorten production cycles: What used to take days or even weeks to complete the
pro- duction cycle can now often be accomplished in a matter of hours by utilizing the
techno- logical capabilities. Lean manufacturing promotes the production of small batches
where one can add “bells and whistles” to later product versions.
4. Speed up response time: Quick response manufacturing reduces the lead time and
speed up the response time. The entire system is flexible and agile that can react swiftly to
capitalize on market changes. Quick response manufacturing can bring the products to the
market much faster, even when the products are highly customised.
5. Ensure that all product components have been quality-tested: Control points and
check points in the system enable to develop testing procedures resulting in detecting
problems at the source. The lean system enables to take corrective and preventive actions
resulting in continuous improvement.
6. Extend employee autonomy: The employee empowerment by providing appropriate
tools and techniques give authority to decision making. Empowered employees in teams
measure work progress and improve team productivity. Teams bring synergy and present
viable solutions to the work-related problems. This kind of involvement can improve
employee morale and performance.
7. Solicit customer feedback: Involving customers at design stage is one of the core
principles of lean manufacturing. A system should be designed to take customer feedback and
adapt to changes over its lifespan. Soliciting customer feedback throughout the lifespan of the
product enables organisation to satisfy customer needs.
8. Reach out to suppliers: Treating suppliers as partners is one of the core principles of
lean manufacturing. Working closely with suppliers lead to mutually beneficial relation- ship
resulting in win-win strategy. Supplier relation management leads to maintain profitability
and drive efficiency resulting in better service to customers.

2.Define the terms muda, muri, and mura. Explain the various types of muda.
Muda is the Japanese term for waste. Muda, in business refers to any activity that does not
add value to the creation of the product or service for the customer. If an activity or process
costs money, consumes time and resources, but without value addition to finished product/
service, then it is definitely Muda.

There are seven types of wastes in Lean Manufacturing guides in spotting Muda in pro-
cesses. These wastes are apparent both in manufacturing and service sector. These seven
wastes are often called as TIMWOOD to remember them easily and are given below:
 Transport: Unnecessary transfer of products or materials from one location to another
 Inventory: All components, work in process and finished product not being processed
and used
 Motion: Excessive or unnecessary movement of a person or machine to perform the
operation
 Waiting: Waiting before performing the next step in the process
 Overproduction: Producing more than what is required
 Over-processing: Processing more than what is necessary to process a product or
service
 Defects: Products that do not meet quality standards and result to rework and down
grade

Mura is the Japanese term for unevenness or variation. In business process terms, these are
inconsistencies in business operations; leading to fluctuations in production. Variations in
production or processing can lead to employees being overworked during peak periods in
order to meet demand, then becoming idle when demand falls. Having uneven workloads can
also lead to work in process inventory accumulation and waiting. When employees are
overworked, there is a higher possibility for defects due to fatigue. The presence of Mura
leads to Muda.

Muri is the Japanese term for overburden. In business process terms, this is referring to as
putting too much stress and strain on people and machines. We can see these in employees
working overtime to meet targets, and machines operating more than 100% of their capacity.
Muri often stems from the presence of Mura. Due to the variation in the pace of work,
employees and machines are sometimes subject to exert effort that is beyond their capacity.
Muri then also leads to Muda. Overburdening people and machines could lead to defects, and
downtime which can lead to excess work in process inventory and waiting.

3. Compare Kaizen with innovation and provide examples.

Criter Kaize Innovati

ia n on
1. Effect Long-term and long lasting but Short-term but dramatic
undramatic
2. Price Small steps Big steps
3. Time frame Continuous and incremental Intermittent and non-incremental
4. Change Gradual and constant Abrupt and volatile
5. Involvement Everybody Select few “champions”
6. Approach Collectivism, group efforts, systems Rugged individualism, individual
approach ideas and efforts
7. Male Maintenance and improvement Scrap and rebuild
8. Spark Conventional know-how and state of Technological break-through, new
the art inventions, new theories
9. Practical Requires little investment but great Requires large investment but little
requirements effort to maintain it effort to maintain it
10. Effort orientation People Technology
11. Evaluation Process and efforts for better results Results for profits
criteria
12. Advantage Works well in slow-growth economy Better suited to a fast-growth economy

4. What is 5S in lean management? How does it help in improving the quality of

products of services?
5S is defined as a methodology that results in a workplace that is clean, uncluttered, safe, and
well organized to help reduce waste and optimize productivity. It's designed to help build a
quality work environment, both physically and mentally.
The 5S system is part of Toyota's Lean Manufacturing methodology designed to reduce waste
within a facility. 5S is typically the first step towards eliminating waste from manufacturing
processes and eventually leads to improving bottom line results. The Top 10 Benefits of
Implementing 5S are:
i. Clean and Pleasant Environment: 5S creates an organised and clean environment.
Employees love to work in a clean and pleasant workplace.
ii. Self Discipline: Employees acquire self-discipline, they need to maintain the
standards (put the tools pack in their positions, daily cleaning, Regular Audits, etc).
iii. Identify and Eliminate Wastes: 5S would bring a lot of wastes to the surface
(Overproduction, excess motion, etc.) Employees can start reducing the wastes and
improve the Productivity
iv. Create More Space: removal of unwanted items and organising the necessary
materials release space. We have found 5S releasing around 10% to 20% more floor
space in most of our engagements.
v. Identify Abnormalities: Oil Leaks, Air Leakages and Vibration of machines can be
identified easily and fixed immediately.
vi. Identify issues in the flow of the materials: Shortage of Parts, Line Imbalances,
excess inventory etc. would come to light once we implement 5S.
vii. Improvement in Safety: 5S helps in creating a safe workplace by reducing accidents
caused by slippery floors, eliminating oil leaks and creating visual indicators.
viii. Improves Machine Uptime: By following daily cleaning and fixing the
abnormalities, the breakdowns of the machines would significantly reduce. From our
experience we have found more than 60% reduction in breakdowns after 5S
implementation.
ix. Improves Quality: By making the workplace visible and clean, the overall quality
improves as defects cannot be hidden. Defects starts reducing and improvement in
First Time Acceptance (FTA) would improve.
x. Improvement in Employee Morale and Positive Attitude: 5S creates a positive
attitude and starts a culture change in the company. Employees starts owning the
workplace and their machines and they have a sense of belongingness to the company.

5. Explain Poka-yoke with examples.

A poka-yoke is a mechanism that is put in place to prevent human error. The purpose of a
poka-yoke is to inhibit, correct or highlight an error as it occurs. Poka-yoke roughly means
"avoid unexpected surprises" or "avoid blunders" in Japanese. Examples of Poka-yoke are:
i. Car safety features
ii. Treadmills
iii. Microwaves, washing machines, dishwashers, and other household appliances
iv. Elevators & garage doors
v. Spell-check functions
vi. Leak-proof water bottles & travel mugs
vii. Power outlets and USB plugs
viii. Overflow outlets in sinks.

6. What is TPM? How is it connected to lean management?

Total productive maintenance (TPM) is the process of using machines, equipment, employees
and supporting processes to maintain and improve the integrity of production and the quality
of systems. TPM’s core objective is to create a workplace that prevents all losses and
achieves zero defects, zero breakdowns, zero accidents, and zero pollution in the entire
production system lifecycle.
The goal of Lean manufacturing is to systematically minimize and eliminate wastes within
the manufacturing process will maximizing efficiency. To achieve this, Lean offers a number
of tools and strategies, like total productive maintenance, that address different areas and
wastes in the workplace.
Maintenance is a staple to any industrial facility and is often thought of as reactive: when a
machine finally breaks down or a piece of equipment fails, the maintenance crew is
scheduled to service it. While this may seem logical, reactive maintenance is unproductive
and can lead to waste of time and resources, wasted motion, inefficiencies, and defects. TPM
is a Lean maintenance program that promotes the concept of frontline workers and operators
being involved in maintenance processes.

7. Create a diagram that illustrates the OEE model and provide explanations.

Overall equipment effectiveness (OEE) is a term used to evaluate how efficiently a

manufacturer's operation is being used. In other words, overall equipment effectiveness helps
you notice a problem in your operations, identify which percentage of manufacturing time is
actually productive and fix it while giving you a standardized gauge for tracking progress.
The goal for measuring your OEE is continuous improvement.

Six big losses

Breakdown

Availability
Set up and
adjustment
OEE
Reduced
speed
Performance
rate
Idling and
minor stoppage

Rejects and
rework
Quality rate

Start up

Overall Equipment Effectiveness Model

Overall equipment effectiveness is a maintenance KPI that measures an asset’s level of
productivity. OEE is a combination of three factors that tell you how efficient an asset is
during the manufacturing process: asset availability, asset performance, and production
quality. Each one can tell you something different about how an asset operates. The OEE
formula is calculated by multiplying availability, performance and quality and is represented
by a percentage.

 Availability – How often does the asset function when needed?

 Performance – How much does the asset produce?
 Quality – How many high-quality items does the asset produce?
OEE = Availability × Performance × Quality.

When an asset operates with an OEE of 100%, it means that every item it produces is without
defect (quality), it is producing as fast as possible (performance), and it experiences no
unplanned downtime (availability).

8. Explain the steps carried out in TPM implementation.

The steps carried out in TPM implementation are:
Step 1: Announcement of TPM. The top management needs to create an environment that
will support the introduction of TPM. Without the support of management, scepticism and
resistance will kill the initiative.
Step 2: Launch a formal education programme. This programme will inform and educate
everyone in the organisation about TPM activities, its benefits, and the importance of
contributions from everyone.
Step 3: Create an organisational support structure. This group will promote and sustain TPM
activities once they begin. Team-based activities are essential to a TPM effort. This group
needs to include members from every level of the organisation, from the top manage- ment to
the shop floor. This structure will promote communication and will guarantee that everyone
is working towards the same goals.
Step 4: Establish basic TPM policies and quantifiable goals. Analyse existing conditions and
set SMART goals—Specific, Measurable, Attainable, Realistic, and Time-based.
Step 5: Outline a detailed master deployment plan. This plan will identify what resources
will be needed and when for training, equipment restoration and improvements, mainte-
nance management systems, and new technologies.
Step 6: TPM kick-off Implementation will begin at this stage.
Step 7: Improve the effectiveness of each and every piece of equipment. Project teams will
analyse each piece of equipment and make necessary improvements.
Step 8: Develop an autonomous maintenance programme for operators. Operators under-
taking pre-scheduled routine cleaning and inspection will help stabilise conditions and stop
accelerated deterioration.
Step 9: Develop a planned or preventive maintenance programme. Create a schedule for
preventive maintenance for each piece of equipment.
Step 10: Conduct training to improve operation and maintenance skills. The maintenance
department will take on the role of teachers and guides to provide training, advice, and
equipment information to the teams.
Step 11: Develop an early equipment management programme. Apply preventive
maintenance principles during the design process of equipment.
Step 12: Continuous improvement. As in any lean initiative, the organisation needs to
develop a continuous improvement mind-set.
 9. How can we integrate theory of constraints with lean management?
The Theory of Constraints and Lean Manufacturing are both systematic methods for
improving manufacturing effectiveness. However, they have very different approaches:
• The TOC focuses on identifying and removing constraints that limit throughput. There-
fore, successful application tends to increase manufacturing capacity.
• Lean manufacturing focuses on eliminating waste from the manufacturing process.
Therefore, successful application tends to reduce manufacturing costs.

Both methodologies have a strong customer focus and are capable of transforming companies
to be faster, stronger, and more agile. When lean and Theory of Constraints are combined,
improvements happen much faster and significant increases in sales are frequently observed.
Lean drives out wastes, and TOC identifies constraints on which to act to increase turnover.
The combination of the two creates a virtuous circle whereby the company becomes
continuously more effective by eliminating the added expenses and simultaneously generates
additional sales that can absorb productivity improvements.
For example, not every constraint is worth addressing, due to limited resources for one; thus,
TOC can help you prioritise while lean manufacturing offers tools and techniques to achieve
improvements.
Lean tools can also help identify constraints through tools such as value stream mapping,
which engages teams in problem-solving, and Gemba, which encourages understanding real-
world issues. Lean tools can also help exploit, subordinate, and evaluate constraint with a
variety of techniques.
Benefits of hybrid techniques are just another way for project management to deploy
methodologies to control work in order to generate better results. Having more tools in your
toolbox means you have more options to address processes and the problems that arise during
the course of processes. In the TOC, Goldratt developed the following goals:
• Increased profit
• Fast improvement of processes
• Improved capacity for making products and developing services
• Reduced lead time on facets of a project
• Reduced inventory
TOC is something every practitioner of Lean and Six Sigma should know. It offers a
relatively simple but powerful approach to process improvement.